Business Monitor International


China Mining Report

Published 03 November 2014

  • 116 pages
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  • Includes 3 free updated quarterly reports
 
$1,295.00
China Mining Report

BMI View: More Chinese miners will cease operations over the coming quarters due to falling mineral prices and waning support from the local governments.

We expect more Chinese miners to come under pressure over the coming quarters due to falling mineral prices and Beijing's pledge to instil more supply discipline in heavy industry. While state-owned firms are generally more insulated from the weakness in commodity prices, the economic slowdown in China will diminish the financial resources of these firms, forcing them to preach greater austerity in the medium term.

China Slowdown To Drag On Mineral Prices
Select Commodity Prices (% chg y-o-y)

We expect China's mining sector to become increasingly consolidated in the coming quarters. This will be driven by the exit of marginal producers, tighter environmental standards as well as the Chinese government's plans to consolidate the industry. For instance, there is a national drive in the coal sector to create 14 giant 'coal-power-rail' hubs with each having a production capacity of at least 100mn tonnes per annum (mntpa) under China's 12th Five-Year Plan (2011-2015). Similarly, Chinese policy makers are attempting to tame excess production in the steel sector through a series of forced closures and consolidation. 

China - Capacity Elimination Tasks For 2014
Industries Capacity Elimination
Iron-making 19mnt
Steel-making 28.7mnt
Coke 12mnt
Ferroalloy 2.3bnt
Copper smelting 0.5mnt
Lead smelting 0.1mnt
Lead-acid battery 23.6mn KVAh
Rare earths 0.1mnt
Source: China's Ministry of Industry and Information Technology (MIIT)

While cooling Chinese economic growth will adversely impact mining operations, we expect the impact to vary across different mineral segments. The lead and tin mine sectors will prove more resilient as demand growth for these metals will be supported by the transitioning of China's economic growth model towards private...

Table of Contents

BMI Industry View
7
SWOT
10
Industry Forecast
12
Bauxite: Pushing For Supply Security
12
Growth To Slow, But Production Won't Collapse
13
Seaborne Reliance Not Going Away
13
Risk To Outlook
14
Table: China - Bauxite Production Forecast
15
Coal: Digging Continues, Despite Green Push
15
Efficiency Gains With Consolidation Push
18
Table: China - Select Coal Mining Projects
19
Taming Pollution
19
Table: China - Coal Production Forecast
20
Copper: Supported By Self-Sufficiency Push
21
Table: China - Select Copper Projects
22
Table: China - Copper Production Forecast
23
Gold: Growth To Continue On Robust Appetite
23
Chinese Miners Better Insulated
24
Gold Bulls In Asia
24
Compelling Case For Gold In China
25
Struggling To Increase Domestic Output
26
Table: China - Largest Gold Projects
27
Heading Abroad For All That Glitters
28
Table: China - Gold Production Forecast
29
Iron Ore: Growth To Lose Momentum
30
Table: China - Select Iron Ore Projects
34
Table: China - Iron Ore Production Forecast
34
Lead: Autos Sector To Lend Support
35
Table: China - Select Lead Mining Projects
36
Table: China - Lead Production Forecast
37
Nickel: Dimming Outlook
37
Table: China - Select Nickel Projects
39
Table: China - Nickel Production Forecast
39
Tin: Yunnan Tin Takes Charge
39
Risks To Outlook
41
Table: China - Tin Production Forecast
42
Zinc: Little Impetus For Expansion
42
Domestic Consumption Offers Little Relief
43
Table: China - Zinc Production Forecast
44
Industry Risk Reward Ratings
45
Risk/Reward Ratings
45
Rewards
45
Industry Rewards
45
Country Rewards
45
Risks
46
Industry Risks
46
Country Risks
46
Table: China - Mining Industry Value & Minerals Production Forecasts
47
Asia - Q3 2014
47
Table: Asia - Mining Risk/Reward Index
51
Regulatory Development
52
Table: Asia - Mining Regulatory Scorecard
55
Table: Political Overview
55
Commodities Forecast
57
Commodity Strategy
57
Iron Ore: Chinese Stimulus Not A Game Changer
57
Steel: Gradual Rationalisation Insufficient To Boost Prices
59
Aluminium: Recent Rally Unlikely To Persist Into H214
60
Copper: Bearish Forecast Appears Well Placed
61
Lead: Picking Up Autos Sector Tailwinds
62
Nickel: Recent Rise To Fall Back In H214
63
Zinc: Potential Test Of Resistance In Coming Weeks
65
Table: Select Commodities - Performance & BMI Forecasts
67
Competitive Landscape
68
Table: China - Key Financial Data For Select Listed Mining Companies
69
Company Profile
70
Aluminum Corporation of China (Chalco)
70
Company Overview
71
Latest Financial Results
71
Table: Chalco - Key Financial Data
73
China Shenhua Energy
75
Table: Shenhua Energy - Key Financial Data
77
Jiangxi Copper
79
Table: Jiangxi Copper - Key Financial Data
82
Shandong Gold
84
Table: Shandong Gold - Key Financial Data
86
Regional Overview
88
Asia - Q3 2014
88
Challenges
88
Opportunities
91
Global Industry Overview
96
Challenges
96
Table: Mining - Select M&A Deals
100
Cause For Optimism
103
Methodology
110
Industry Forecast Methodology
110
Sources
111
Risk/Reward Rating Methodology
112
Table: Weighting Of Indicators
114

The China Mining Report has been researched at source and features Business Monitor International (BMI)'s mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI's China Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in China.

Key Benefits

  • Use BMI's independent industry forecasts on China to test other views - a key input for successful budgeting and planning in this mining market.
  • Target business opportunities and risks in China's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in China.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity), Key Projects Tables and Competitive Landscape Tables.

Coverage

BMI Industry View

Summary of BMI's key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.

Business Environment Rankings

BMI's Mining Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (mining companies and support service providers) in the regional mining market. The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry rankings products.

Key Projects

Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.

BMI Industry Forecasts

Historic data series (2009-2012) and forecasts to end-2018 for all key industry and economic indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast. Indicators include:

  • Mining Industry: Industry size (US$mn), real growth (%), % of GDP, employment ('000), workforce as % of total workforce, average wage (US$).
  • Output:Production volumes ('000 tonnes, carats etc.) for all major metals, minerals, ores and gems mined in each state, including bauxite, copper, gold, coal, lead, silver, tin, titanium, uranium, zinc etc.
  • Exports: Value of exports (US$mn) for all major metals, minerals, ores and gems mined in each state .
  • Commodity Markets: Global demand, supply, stocks and benchmark prices (US$) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.

BMI Macroeconomic Forecasts

BMI forecasts to end-2018 for all headline macroeconomic indicators, including real GDP growth (%), inflation (%), fiscal balance (% of GDP), trade balance (US$bn), current account (US$bn) and external debt (US$bn).

Competitive Landscape Tables & Analysis

Comparative company analyses and tables detailing by US$ sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc